Hims & Hers Slides After Earnings Miss Despite Strong Growth in Q2
A Promising Telehealth Player Faces Investor Skepticism Amid Slower GLP-1 Momentum
Hims & Hers Health Inc. (NYSE: HIMS) saw its stock slip on Friday despite reporting another quarter of robust year-over-year growth. The telehealth company, which offers a direct-to-consumer model for wellness, skincare, sexual health, and mental health services, posted Q2 2025 revenue of $278.2 million, missing Wall Street estimates of $279.3 million. Still, the figure represents a 41% increase compared to the same quarter last year.
The stock reacted negatively in early trading, dropping over 12% intraday, as the market digested not just the miss, but also some worrying trends emerging under the surface.
One of the most debated topics among investors and analysts is the decline in momentum around GLP-1 medications, which are used for weight loss and diabetes management. Hims has heavily marketed its GLP-1 offerings recently, and a slower-than-expected uptake could signal trouble for future revenue acceleration. CEO Andrew Dudum acknowledged the shifting dynamics, stating that while GLP-1 remains a "strategic focus," the company aims to diversify further into mental health and dermatology services.
While the company reaffirmed its full-year revenue guidance of $1.18 billion to $1.20 billion, some on Wall Street fear this may be overly optimistic. Notably, operating expenses rose significantly due to continued high marketing spend, which reached nearly 30% of revenue. Analysts are concerned that while customer acquisition remains strong, the cost of growth is starting to bite into margins.
Several analysts reiterated their "Hold" or "Neutral" ratings on HIMS, noting that the valuation is still rich at nearly 5x forward sales, especially if revenue growth slows. At the same time, short interest has crept higher, indicating increasing bearish sentiment.
This comes at a time when the broader telehealth sector is under pressure, with peers like Teladoc Health Inc. (NYSE: TDOC) also experiencing valuation compressions amid rising competition and normalization of post-COVID demand.
Still, bulls argue that Hims has done an exceptional job building a sticky, subscription-based business with impressive retention rates. The platform's consumer-centric model, slick branding, and expanding product line continue to resonate with younger demographics, particularly millennials and Gen Z.
The coming quarters will be pivotal as investors look for more clarity around profitability timelines, especially as GLP-1 sales normalize and the company faces increasing competition in the digital health arena. Whether HIMS can justify its premium valuation may hinge on how well it navigates this transition from hypergrowth to sustainable profitability.
